NEWS
Africa Specialty Risk is seeking new partners and capacity
Startup reinsurer Africa Specialty Risk has been in business for only two years, but it has big plans.
Africa Specialty Risk (ASR) is in Monte Carlo in force this year—seeking capacity and educating markets about the opportunities available in Africa, which is a $60 billion market and growing.
Brian McGregor, head of property for the company, stresses that the business looks at other reinsurers as potential partners, not competitors. “As a new reinsurance entity on the continent, we work closely with other reinsurers in Africa, we don’t see them as competitors.
“We segment our business by different specialisms, and our partners on the continent, generally, are regionally focused. So it creates a good model for cooperation,” he explained.
He said partnerships create value within the business. “It is essentially our value proposition. We try to spread these risks across different lines of business across geographies and, more importantly, across time. So we can spread this over the next few years.”
To do that, McGregor said, ASR needs to build more capacity and bring more insurers and reinsurers into the mix. That is why he and his colleagues are in Monte Carlo.
“It’s all about capacity building,” he said. “It’s the front-end capacity—to bring new markets to bring new paper into Africa—and across multiple different lines of business such as these new products we hear of at Monte Carlo. We would be interested in bringing them to the African continent, we have a great distribution to do that.
“Then there is retrocession. We need to build capacity back into our business again, to help bring in more cover providers.”
“It all starts off with the political risk and trade credit.”
Brian McGregor, Africa Specialty Risk
Telling the story
The annual Monte Carlo reinsurance jamboree gives ASR the opportunity to meet existing partners and strengthen relations and to find new reinsurers and insurers to work with.
“GIC India’s a big partner for us, Africa Re is a partner on the political risk and trade credit side of our business,” he said. “SCR Maroc we see tomorrow and we’re also meeting South African insurers.”
McGregor says the company’s business plan starts with political risk and trade credit and other lines—ASR offers nine—are added after that.
“Our business model starts with political risk and trade credit,” he said. “We provide this cover to encourage investors to take risk in Africa. By de-risking and mitigating those investments, that encourages first step people investing on the continent, we then bring in our construction policies, which help build those investments.
“We have a range of operational covers such as property and energy, liability and financial lines such as directors & officers. We even do kidnap insurance. It all starts off with the political risk and trade credit, and the others follow from them. That helps us retain our risk so we have a very low churn rate.
“Once we start with a client, we don’t leave—we develop a long-term relationship. And we’re able to keep that through the various different needs of that client.”
Convincing insurance investors to support business in Africa is a largely a matter of explaining the opportunity and the potential for growth, McGregor said.
“It has growing markets and a growing population. It’s one of the few regions of the world that has that,” he said. “The middle class is growing extremely fast.
“It’s a huge opportunity. The premium in Africa is about $60 billion for life and non-life; within that area we focus on corporate and specialty. We estimate that to be around a $15 billion mark. And that’s growing.”
Main image: Shutterstock / fizkes
